Texas Tax Sales – Worth Messing With
Posted by Courtney Lane on Mon, Aug 16, 2010
You know the saying….”don’t mess with Texas.” Well, when it comes to Tax Sales in Texas, we highly recommend messing with Texas, since as they say “everything is bigger in Texas.”
Texas is a redeemable deed state and jurisdictions hold their Tax Sales on the first Tuesday of every month. Texas also offers one of the highest returns available in the country from tax sales, making it a favorite of mine.
Why We Like Texas Tax Sales:
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Texas is what we call a redeemable deed state, meaning that the sale is a deed sale but the title given by the deed is subject to a right of redemption.
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This right of redemption varies from 6 months to two years depending on the type of property sold.
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As we mentioned earlier, Texas offers one of the highest returns available from tax sales, being a 25% penalty on the amount bid for redemption during any part of the first year after sale and an additional 25% penalty for any portion of the second year of the redemption period, assuming that the property qualifies for a second year. This means that a property with an outstanding tax liability of $2,000.00 and a market value of $100,000 may sell for $50,000.00 and the redemption amount received by the deed purchaser would be $62,500.00 for any redemption during the first twelve months and $75,000.00 for redemption during the second year, if applicable.
Texas Bidding Methods:
The bidding method is the “highest and best bid” wins method, meaning that the individual who is willing to pay the most for the property is the winner. The winning bid must exceed the judgment amount that is recorded or the market value of the property that the court has set, whichever is less.
Importance of Due Diligence:
Because of the likelihood of ending up with the property we strongly recommend that any potential investor does their due diligence. If you are familiar with TaxSaleLists.com, we are always emphasizing the importance of due diligence. With that said, Texas is one state where you better make sure you are following proper due diligence procedures since there is a very low redemption rate, meaning you have a very good chance of ending up with any properties you are the highest bidder on. We strongly suggest that you attempt to look at as many properties as you can. If you follow the due diligence process that we suggest in our training manual you will avoid most mistakes.
Lists:
The lists published by the most of the counties have no physical addresses for the properties, so it is necessary to get the situs addresses and determine location of the properties. Each city, like all cities, have undesirable areas that you may want to avoid. The reason I say may, is that I have found that good properties in bad areas are not necessarily a bad investment.
www.TaxSaleLists.com does offer “data enhanced” lists for a large number of Texas counties, this means that we can provide the assessor information for these counties.
If you would like more information about the Texas Tax Sales, click here and download our whitepaper on Texas.